The Cost of a Particular Source of Capital (Debt,preferred Stock,common

question 131

True/False

The cost of a particular source of capital (debt,preferred stock,common stock)is equal to the investor's required rate of return after adjusting for the effects of both flotation costs and corporate taxes.

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Definitions:

Misrepresentation

The provision of false, misleading, or incorrect information about a material fact, intentionally or unintentionally, in a contractual agreement.

Privity Rule

A principle in contract law that states that contracts are private agreements between the parties who have entered into them, affecting no third parties.

Thing or Benefit

Refers to any item of value or advantage that is provided or promised in a transaction or agreement.

Unconscionable Contracts

Agreements that are so unfairly one-sided that they are deemed immoral or unjust and are therefore unenforceable under the law.